We are drafting disclosure schedules under tight deadlines, and our legal counsel is advising us to disclose absolutely everything, but we fear too much detail will invite price-chipping. How do we manage this balance while executing our company's quarterly Rocks?

Question

Tyler Smith · Accepted Answer

Drafting disclosure schedules is a high-stakes balancing act. While you must protect yourself from post-close breach of representation claims by disclosing material facts, over-disclosing minor, irrelevant issues can give a buyer excuses to renegotiate the purchase price.

To manage this process without losing focus on your day-to-day operations, treat the disclosure schedule preparation as a high-priority Rock for your leadership team. Assign specific sections of the schedules to the appropriate seats on your Accountability Chart. For example, your head of finance handles the material contracts schedules, while operations handles equipment and software leases.

Use your weekly Level 10 Meetings™ to track progress and use IDS® to resolve any complex disclosure questions. Focus your disclosures on truly material items that meet the thresholds defined in your purchase agreement. Do not list every minor customer complaint or low-value software subscription. By keeping your disclosures focused on material items and managing the process through your existing operating system, you protect your valuation while keeping your team focused on hitting their quarterly targets.